High airfares to persist as travel booms, new AirAsia boss says

There’s no end in sight to the high airfares that are a mainstay of the world’s post-pandemic travel boom, according to Asia’s biggest low-cost carrier. Travelers may see a little reprieve next year as jet fuel prices decline and the airline’s flight capacity rises, said AirAsia Aviation CEO Bo Lingam, who will head a new listed entity called AirAsia Group following a merger between the company’s short and long haul operations in September. But strong demand means airfares are unlikely to return to pre-pandemic levels any time soon, he said. “My load factor is around 90% — this was unheard of pre-Covid,” Lingam, 59, said in an interview at the company’s headquarters in Sepang, Malaysia. The global aviation industry has been transformed as the post-pandemic reopening unleashed a wave of pent-up travel demand that’s sent ticket prices surging faster than inflation in many parts of the world. At the same time, a series of supply chain constraints from aircraft delivery delays to unplanned engine maintenance has left many airlines struggling to roll out enough flights. For AirAsia, the demand is underpinning ambitions to establish the world’s first low-cost carrier network by 2030, using its Southeast Asia bases as a hub. So far this year that’s seen it add flights to Almaty in Kazakhstan and the start of operations by its Cambodian unit. Next up will be to start flying to Nairobi, Kenya, from October. Its further-afield routes will be serviced by Airbus SE’s new long-range A321 models, which can fly further at an economical cost. Lingam said the company intends to convert its entire 377-plane orderbook to the A321 LR models and has made a separate order for 50 XLR models. “The cost of operating the aircraft is much cheaper — at least 25% to 30% cheaper — because it’s single aisle and you don’t need to worry about filling up 500 seats, as opposed to 240 seats,” Lingam said. <br/>